Wall Street weakened, banks drop on revenue updates

Traders work on the floor of the New York Stock Exchange. Photo / Getty Images

Wall Street weakened as bank stocks fell following disappointing revenue updates from JPMorgan Chase and Bank of America.

Executives of the two biggest US banks said second-quarter trading revenue was set to drop at least 10 percent, according to media reports.

In 2.45pm trading in New York, the Dow Jones Industrial Average declined 0.15 per cent, while the Nasdaq Composite Index slid 0.3 per cent. In 2.30pm trading, the Standard & Poor's 500 Index advanced shed 0.21 per cent.

The Dow weakened as slides in shares of Goldman Sachs and those of JPMorgan Chase, down 3.4 per cent and 2.4 per cent respectively, outweighed gains in shares of Pfizer and those of Johnson & Johnson, recently up 1.7 per cent and 1 per cent respectively.

Shares of Bank of America dropped 2.9 per cent as of 2.58pm in New York.

In other earnings disappointments, shares of Michael Kors sank, down 9 per cent as of 3.07pm, after the luxury fashion retailer offered a full-year earnings outlook that fell short of expectations.

It also announced plans to close between as many as 125 of its full-price retail stores over the next two years.

Also sliding was the price of oil amid fresh concern about the global glut.

"There doesn't seem to be an end to supply out there," Bob Yawger, director of the futures division at Mizuho Securities USA in New York, told Bloomberg. "And demand is not exactly rip-roaring."

Meanwhile, a National Association of Realtors report showed its pending home sales index fell 1.3 per cent to 109.8 in April, from a downwardly revised 111.3 in March. Significantly weak supply levels are spurring deteriorating affordability conditions, Lawrence Yun, NAR chief economist, said in the report.

"Much of the country for the second straight month saw a pullback in pending sales as the rate of new listings continues to lag the quicker pace of homes coming off the market," according to Yun. "Realtors are indicating that foot traffic is higher than a year ago, but it's obviously not translating to more sales."

"Prospective buyers are feeling the double whammy this spring of inventory that's down 9 per cent from a year ago and price appreciation that's much faster than any rise they've likely seen in their income," Yun noted.

In Europe, the Stoxx 600 Index ended the day with a 0.21 per cent decline from the previous close. The UK's FTSE 100 Index fell 0.1 per cent, while France's CAC40 Index dropped 0.4 per cent.

Germany's DAX Index rose 0.1 per cent.

A YouGov poll showed that UK Prime Minister Theresa May could lose control of parliament in in next month's election. When asked by a reporter if she would resign if she lost seats, May dodged the question, saying that the only poll that mattered was the election on June 8, Reuters reported.